Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://southasiainvestor.blogspot.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Saturday, February 6, 2010

FAQs on India's Massive 34% Defense Budget Hike

Last year, India decided on a massive 34% increase year-over-year in its defense spending. Here are some frequently asked questions and answers about this dramatic move that puts India among the world's biggest spenders on defense.

India's own specified limit of 3% has been observed only by excluding several items like the cost of the MoD and the expenditure on military pensions which by itself amounts to 15% of the total defense outlay. Several other items like the Jammu and Kashmir Light Infantry (JAKLI, a regular regiment of the army consisting of thirteen battalions) and the Coast Guard are also excluded. A substantial part of the cost of the nuclear arsenal and allied systems is excluded. All para-military forces including the ones directly involved in border management are excluded. The Parliamentary Committee on Defense spends most of its time on personnel matters and resolving issues of protocol between the service chiefs and the defense secretary. The Committee looks at DE but beyond stating that DE should be pegged at 3% of GDP, it has nothing substantial to contribute. Clearly, parliamentary oversight and control seems to be missing. For several years, DE in aggregate has crossed 3% of GDP.

Pakistan spends about $4.3 billion annually, less than 3% of its GDP, and there has been no real increase year-over-year in 2010. There was a 10.15 per cent nominal increase from Rs 311.303 billion revised defense budget for 2009-2010. In real terms, however, it represents a decrease because inflation in Pakistan exceeds nominal increase in defense. Pakistan’s defense allocation does not include foreign assistance, which is expected add about a billion dollars to defense spending for operations against Taliban insurgents. The aggregate $5.5 billion of military spending by Pakistan accounts for about 3% of its $ 175 billion GDP.

“The war on terror has already cost us over $35 billion since 2001-02. We now face the prospects of incurring huge expenditure on account of counter-insurgency,” according to Pakistan's deputy finance minister Hina Rabbani Khar.

Q2: Doesn't India need to spend more on defense to fight the terrorists in the region?

A2: The military brass in India used the Mumbai attacks in late 2008 to argue for and win a 34% increase in defense budget. But terrorism is just an excuse by Indian military to get large funds and buy expensive cold war era weapons which are useless against the asymmetrical threat from the terrorists any way. It lines the pockets of the arms dealers (and a few corrupt generals and officials) without increasing India's security against potential terror attacks.

The 34% increase can not be explained by Indian military pay hikes either, given India's huge weapons' shopping list and its status as one of the biggest importers of military hardware in the world. The real aim is to intimidate India's neighbors, and assert India's hegemony. But it won't work as long as India has serious challenges of poverty, illiteracy, hunger, social inequity and multiple insurgencies at home by its most impoverished citizens.

Q3: Won't India just grow out of poverty, hunger, illiteracy through rapid economic expansion of its economy?

A3: Over a decade of rapid economic growth in India has done little to help its poor, hungry and illiterate population.

India has miserably failed to use a period of high economic growth to lift tens of millions of people out of poverty, falling far short of China’s record in protecting its population from the ravages of chronic hunger, United Nations officials said recently. In 2008, British Development Minister Alexander contrasted the rapid growth in China with India's economic success - highlighting government figures that showed the number of poor people had dropped in the one-party communist state by 70% since 1990 but had risen in the world's biggest democracy by 5%.

In the context of unprecedented economic growth (9-10 percent annually) and lack of national food security, over 60 percent of Indian children are wasted, stunted, underweight or a combination of the above. As a result, India ranks number 62 along with Bangladesh at 67 in the PHI (Poverty Hunger Index)ranking out of a total of 81 countries. Both nations are included among the low performing countries in progress towards MDG1 (Millennium Development Goals) with countries such as Nepal (number 58), Ethiopia (number 60), or Zimbabwe (number 74).

Ranked at 45 on PHI index, Pakistan is well ahead of India at number 62, and it is included in the medium performing countries. PHI is a new composite indicator – the Poverty and Hunger Index (PHI) – developed to measure countries’ performance towards achieving MDG1 on halving poverty and hunger by 2015. The PHI combines all five official MDG1 indicators, including a) the proportion of population living on less than US$ 1/day, b) poverty gap ratio, c) share of the poorest quintile in national income or consumption, d) prevalence of underweight in children under five years of age, and d) the proportion of population undernourished.

A4: Defense spending should not be a sacred cow. Huge increases shouldn't get approved with little or no debate, and there should be much greater oversight of how it's spent.

It needs to be discussed and debated rationally in the parliament and the media.

What I find is that there is more debate and discussion in Pakistan on defense spending than there is in India, in spite of the fact Pakistan is fighting a war against determined insurgents in the North West.

In spite of its many other urgent issues like access to food, education and health care, it's a shame that a huge 34% boost in defense budget got approved in India without much serious discussion. A similar dramatic increase in Pakistan would have elicited howls of protest and loud demands to curtail it.

Q5: Why should there be any discussion or debate in India on defense budgets when there is consensus among all political parties that military spending should increase?

A5: That may be a good explanation of lack of debate, but the size of the increase at 34% year over year should be too big to slide through parliament without much scrutiny. And it's strange that there is no such consensus on similar spending increases on food, health care, education and poverty alleviation where India lags behind many of its neighbors.

In 2008, Indian Planning Commission member Syeda Hameed acknowledged that India is worse than Bangladesh and Pakistan when it comes to nourishment and is showing little improvement.

Speaking at a conference on "Malnutrition an emergency: what it costs the nation", she said even Prime Minister Manmohan Singh during interactions with the Planning Commission has described malnourishment as the "blackest mark".

"I should not compare. But countries like Bangladesh, Pakistan and Sri Lanka are better," she said. The conference was organized last year by the Confederation of Indian Industry and the Ministry of Development of Northeastern Region.

According to India's Family Health Survey, almost 46 percent of children under the age of three are undernourished - an improvement of just one percent in the last seven years. This is only a shade better than Sub-Saharan Africa where about 35 percent of children are malnourished.

Unlike Indian military which got 34% increase this year, there is no one talking about a similar spending increase for human development in a nation that is slipping to lower ranks in human development. In fact, the latest Human Development Report for 2009 shows that all major South Asian nations have slipped further down relative to other regions of the world. Pakistan's HDI ranking dropped 3 places from 138 last year to 141 this year, and India slipped six places from 128 in 2008 to 134 this year.

The total per-capita expenditure on health (central as well as state expenditure) is about a third of the per-capita expenditure on defense in India. This low level of funding is the prime reason for poor health parameters which in turn keeps a large proportion of the population in perpetual debt and poverty. The UN millennium development goals pertaining to mortality rates and poverty are not likely to be achieved mainly on account of poor spending and delivery in the health sector. The allocation for federal spending on health in the current year is Rs 22,641 crores or merely 0.4% of GDP.

Q6: Why Is the Indian defense spending any of this blogger's business?

A6: India's military spending directly affects the entire south Asian region. It increases the threat perception in the neighborhood, particularly when the Indian military brass engages in threatening rhetoric in the midst of its huge arms buildup. It distorts the spending priorities of Pakistan, a smaller neighbor which was invaded and divided by India in 1971.

Recently, Lt-General A S Lamba of Indian Army has been quoted by the Indian media as boasting about a "massive thrust into Rawalpindi to quiet Pakistanis within 48 hours of the start of assault." Indian Army chief General Deepak Kapoor has said India is ready for a “the successful firming-up of the cold start strategy (to be able to go to war promptly) in the multiple fronts against multiple different militias at the same time.” General Kapoor has talked about taking on China and Pakistan at the same time.

India has over 6000 tanks, and it is inconceivable that these tanks will roll over the Himalayas to invade China. These tanks are meant to invade Pakistan in the plains of Punjab and the deserts of Sind. Indian Army has 33 infantry divisions. Twenty-four are on Pakistan borders. It has three armored divisions, all three are positioned near Pakistan borders. There are three mechanized divisions in India, all three are on Pakistan borders.

37 comments:

Anonymous
said...

And after all this expenditure, not a square inch of lost territory gained - not now nor these past 60 odd years. YET some years ago the top officer cadre of the Armed Forces engaged the services of a private consultant (MARG?) to push for a pay hike to bring them on par with the high flyers of the private sector.

For all this sort of thing, millions of poor have remained poor and will continue to do so.

DC: "So I guess killing of 3 million East Pakistanis from Mar 1971 to Dec 1971 was something which had no bearing on 10 million East Pakistanis flooding into india as refugees and finally Dec 16 1971."

You are repeating the oft-repeated Indian war myths that have been thoroughly discredited by many independent researchers about the events, the numbers and the multiple culprits.

But clearly the behavior of the West Pak politicians and the miltary was a contributing factor, but not the deciding factor in the break-up of Pakistan. The Indian invasion is what actually broke up Pakistan.

Many nations, including US and Nigeria, have fought extended and bloody civil wars that were eventually settled without division. The difference was the absence of foreign invaders.

One piece of advice: Stop your India obsession and concentrate on establishing democracy in Pakistan and eradication of Intolerance which is giving rise to.. Correction: which has given rise to Terrorism. 3000 people died in Pakistan last year. Guess who killed them? Certainly not the arms India is buying from all over the world but your own citizens...

You would serve your country better by writing articles on how Pakistan got into this mess.Write about why even after sixty-god-damned-years Pakistan doesn't have democratic institutions despite the supreme leader of newly born Pakistan craving for Westminster style democracy.Write about why Pakistani crickets "bite the ball"(its a term I've coined which means cheating even though you know there is a high possibility that you will be caught with your pants down).

Stop obsessing about India whether you like it or not is the fastest growing democracy in the world. We have problems but we are working on them.

Stop writing the same thing again and again in different styles and quoting the same "sources".

Think about what your country needs right now and write about that. Writing a zillion times about how much India spends on Defence is NOT going to help Pakistan in anyway. Infact, people of which country have commited acts of terror in Pakistan? The answer is Pakistanis themselves are their worst villains.

anoop: "I bet the Bengalis whose Mothers and Daughters were raped by Pakistan army Jawans would disagree with you."

And the survivors and the families of the victims of Indian sponsored, trained and equipped Mukti Bahini terrorists would strongly disagree with you!

The distortions such as the identity of the Jessore massacre of non-Bengalis (investigated by Sarmila Bose), and ignoring and then rewarding the killings by thugs like Kader "Tiger" Siddiqui have characterized the highly slanted accounts of the civil war in East Pakistan that claimed victims of all ethnicities, religions and opinions.

"To try to bolster her argument, she claims that the size of the Pakistani army in Bangladesh was only 34,000 men. Then she asserts: "For an army of 34,000 to rape on this scale in eight or nine months (while fighting insurgency, guerrilla war and an invasion by India), each would-be perpetrator would have had to commit rape at an incredible rate."

I find Bose's arguments, based on her more accurate numbers of Pak military personnel, far more persuasive. The total number of POWs taken by India was about 90,000. No more than half these were military personnel. I know it because one of my relatives was a civilian POW, part of the large civilian bureaucracy in East Pakistan.

I have heard tales of horror from innocent civilian Bengalis and Biharis who fled East Pakistan because of the civil war involving Pakistani military and indiscriminate attacks by Mukti Bahini murderers and terrorists trained by the Indian RAW and military, all of whom now pose as liberators. Some of them, such as Kader Siddiqui, have been involved in rebellions and crimes against Bengalis since 1971.

I think you, unlike Bose, have bought into a highly exaggerated narrative about Bangladesh without questioning any of the so-called "nationalists" claims.

The story of a former colleague of mine from Bangladesh says a lot about the atrocities committed in East Pakistan by all sides. His father was picked up by Pakistan Army and was never seen again, presumably killed by Pak military. His brother then joined Mukti Bahini, fought Pakistan Army, and then he was himself killed by fellow Mukti fighters in front of his brother (my colleagues) and his mother who begged for him to be spared.

DC: "why wouldn't india invade if 10 million East Pakistanis flood to their country. In fact entire East Pakistan would have flooded if the war didn't happen."

Every war, including the civil war in East Pakistan, creates refugees, as has been observed recently in Swat and South Waziristan.

The civil war in East Pakistan was engineered by Indians and RAW agents through their sponsorship of Mukti Bahini, with the purpose of creating a refugee problem, and then exploiting it to the max with media propaganda and finally direct invasion.

I think Indian democracy is a cruel hoax perpetrated on the largest population of poor, hungry and illiterate people in the world. The biggest beneficiaries of Indian democracy are a small percent of population in living in major urban centers. The vast majority of Indians are being exploited to create wealth for the few, as obvious from the horrible social indicators for India.

Just look at the so called Operation Green Hunt against Maoists described as follows by the Hindu<:

"Away from the gaze of the media and the judiciary, the adivasis of Bastar are paying a heavy price … for just being there. "

Last year, British writer William Dalrymple described India's insurgencies as "no less serious" than the Taliban insurgency in Pakistan.

"Every war, including the civil war in East Pakistan, creates refugees, as has been observed recently in Swat and South Waziristan.

So, does that justify India forced to recv 10 million refugees from East Pakistan and DO NOTHING TO STOP IT.

"The civil war in East Pakistan was engineered by Indians and RAW agents through their sponsorship of Mukti Bahini, "

Then India and RAW must have sponsored Yahah Khan and Bhutto to reject the election result where AL won and Mujibur won to become the PM. But hey west Pakistanis can not tolerate a bengali ruling over them. Bangladesh was formed on Mar 25 1971 itself (long before India got involved) when Mujibur fed up with West Pakistan's attitude declared that East pak is a separate nation. It was then Yahaya Khan decided to have operation searchlight which killed 3 million bengalis.

Before Blaming India and RAW accept what created the discontentment and eventually the genocide.

Here's a link about poverty in India - which was the headlines from Time of India:http://timesofindia.indiatimes.com/india/No-financial-crisis-impact-Indias-poor-grew-by-34-mn/articleshow/5553859.cms

I dont know if defense budgets can be sacrificed when India and Pakistan have a fundamental problem of hate based on how they think each side is 'correct' in their viewpoint.

However the above link is a shameful reminder for both countries of the levels of poverty which we tolerate among our people. But I doubt if anything will shame us into solving our real problems - we still have the get over our superficial problems of hate based on religion, class and caste.

Regarding the comment where you say India is starving its people to achieve military might. You are wrong on many aspects. You dont lower your defences against a threat to your existence just because many in your territory live unprivileged lives. Besides, Pakistan still harps on Kashmir even after suffering such great loss(es). Is it not true that Kashmir was responsible for end of Jinnah's idea of Pakistan?? But, has Pakistan left the issue to pursue its development?? No..

Why in that case should we lower our military preparedness? You may see a hike of 34% but only 2.5% of GDP is allocated to defence unlike in Pakistan where the percentage is more than 3% of GDP. So, if you want to make a case there is a better case to be made for Pakistan than India which is growing as the fastest Democracy in the world. Pakistan has been living beyond its means for years now. It wants to have Nuclear weapons jewelry on its back but is not shamed to beg for assistance from Major Powers. When the Major powers decide to stop giving money to splurge on its expensive tastes Pakistan's economy stagnates like it did in the 1990's. Economically Pakistan stagnated during those 10 years Pakistan didnt get aid. The economy is weaker still now. So, Pakistan should cut its defence expenditure instead of hiking it. India can afford it because being a bigger country it has bigger responsibilities and has a very bright future when compared to ailing Pakistan.

US has agreed to provide 7.5 Billion,an unprecedented amount,to Pakistan. And, Pakistan still insists that it needs to increase its defence budget instead of diverting the money to aid its ailing economy. Atleast in the case of India its not begging around the world to sponsor its defence! We are aid givers now. That was our aim when we got independence 60 years ago to develop ourselves to an extent to stop receiving aid and become aid givers. Has there been any goal for Pakistan since its creation??

India is stated to be the next big thing and has to have certain kind of Defence that middle level power countries like Pakistan cannot even dream of. So in this scenario your argument doesn't make any sense.

anoop:"Regarding the comment where you say India is starving its people to achieve military might. You are wrong on many aspects. You dont lower your defences against a threat to your existence just because many in your territory live unprivileged lives."

You are just as prone to misinformation and propaganda as the rest of Indians, including legislators.

India's real defense expenditures are much more than the $30 billion figure you see in the budget, because this figure excludes India's considerable nuclear arsenal, cost of maintaining Kashmir occupation, and the cost of military pensions, etc.

The other issue that is not discussed is whether the expensive cold-war era weapons really add to India's security. As an example, India is spending over a billion dollars on an old Russian aircraft carrier Admiral Gorshkov, while Russians themselves are buying cheaper and more effective Mistral warships from France.

You should read a detailed discussion of India's defense spending by retired Col. Pavan Nair of the Indian Army that I published on this blog.

If there was a serious discussion and debate on 34% hike and big ticket items in Indian parliament and the media, I think the outcome would have been different and better for the Indian people.

Here are excerpts from WSJ story on US arms deals with India and Pakistan:

The U.S. has made billions of dollars in weapons deals with India, which is in the midst of a five-year, $50 billion push to modernize its military.

At the same time, American military aid to Pakistan stands to nearly double next year, allowing Islamabad to acquire more U.S.-made helicopters, night-vision goggles and other military equipment. The aid has made it easier for Pakistan to ramp up its fight against militants on the Afghan border, as the U.S. tries to convince Islamabad that its biggest security threat is within the country, not in India.

During a late January trip to Islamabad, Defense Secretary Robert Gates said the U.S. would for the first time give Pakistan a dozen surveillance drones, a longstanding Pakistani request.------------Washington's relationships with the two nations are very different. India, which is wealthier and larger than its neighbor, pays for weapons purchases with its own funds. Pakistan, by contrast, uses American grants to fund most of its arms purchases. A new U.S. counterinsurgency assistance fund for Pakistan is slated to increase from $700 million in fiscal year 2010 to $1.2 billion in fiscal year 2011.

"We do straight commercial deals with India, while Pakistan effectively uses the money we give them to buy our equipment," said a U.S. official who works with the two countries. "But we think that's ultimately in our national interest because it makes the Pakistanis more capable of dealing with their homegrown terrorists."

India is one of the largest buyers of foreign-made munitions, with a long shopping list which includes warships, fighter jets, tanks and other weapons. Its defense budget is $30 billion for the fiscal year ending March 31, a 70% increase from five years ago. The country is preparing its military to deal with multiple potential threats, including conflict with Pakistan. Tensions have recently flared between India and China over territorial claims along their border. China defeated India in a short war in 1962.

"For 2010 and 2011, India could well be the most important market in the world for defense contractors looking to make foreign military sales," said Tom Captain, the vice chairman of Deloitte LLP's aerospace and defense practice.

Russia has been India's main source of military hardware for decades, supplying about 70% of equipment now in use. Moscow is working to keep that position, with talks ongoing to sell India 29 MiG-29K carrier-borne jet fighters, according to an Indian Defense Ministry spokesman.

The Obama administration is trying to persuade New Delhi to buy American jet fighters instead, a shift White House officials say would lead to closer military and political relations between India and the U.S. It would also be a bonanza for U.S. defense contractors, and has dispatched senior officials such as Mr. Gates to New Delhi to deliver the message that Washington hopes India will choose American defense firms for major purchases in the years ahead.

Shortly after a late January visit by Mr. Gates—on the same tour that took him to Islamabad—In late January, the administration signed off on India's request to purchase 145 U.S.-made howitzers, a $647 million deal.Pentagon spokesman Geoff Morrell said Mr. Gates's visit didn't affect the substance or timing of the howitzer purchase.

That came days after India formally expressed its intent to purchase 10 cargo transport aircraft from Boeing Co. in a deal analysts say could be worth more than $2 billion. Last year, India spent $2.1 billion on eight Boeing long-range Poseidon reconnaissance aircraft for the Indian navy.

India's 2010-2011 budget is up another 8.13 percent on top of the 34% increase in 2009-2010, according to Indiaserver.com.

India's defence expenditure has been raised to Rs.147,344 crore (Rs.1.47 trillion/$32 billion) for 2010-11, up 8.13 percent from the revised estimates of the previous fiscal, in the budget presented by Finance Minister Pranab Mukherjee in the Lok Sabha Friday.

"Secure borders and security of life and property fosters development. I propose to increase the allocation for defence to Rs.147,344 crore. This would include Rs.60,000 crore for capital expenditure," Mukherjee said in his budget speech.

"Needless to say, any additional requirement for the security of the nation will be provided for," he added.

Defence Minister A.K. Antony declined to comment on the allocations.

Though the expenditure has been hiked by Rs.11,080 crore, in real terms, however, the hike works out to only 3.98 percent as Rs.141,703 crore had been originally allocated for 2009-10 but this was later revised to Rs.136,264 crore.

The allocation for 2010-11 works out to 11 percent of India's Rs.11,08,749 crore budget for the fiscal, down one percent from the previous year

The capital expenditure of Rs.60,000 crore is higher by Rs.5,176 crore than the Rs.54,824 crore originally allocated for the previous fiscal but Rs.7,000 crore of this was returned as unspent. A similar amount was returned in 2008-09.

As in the past, the 1.2 million-strong Indian Army has been granted the lion's share, but at Rs.57,326 crore this is lower by Rs.1,322 from the Rs.58,648 crore originally allocated for 2009-10, Rs.740 crore of which was returned.

The Indian Navy has been allocated Rs.9,329 crore, Rs.1,007 crore more than the Rs.8,322 that was allocated for the previous fiscal which was later raised to Rs.9,312 crore. In real terms, the raise amounts to just Rs.17 crore.

In the case of the Indian Air Force, its allocation of Rs.15,210 crore is Rs.992 crore higher than the Rs.14,318 allocated for the previous fiscal that was later raised to Rs.14,681.

The ordnance factories are perhaps the biggest losers. Originally allocated Rs.832 crore for the previous fiscal, this was raised to Rs.2,187 crore and has now been pegged at Rs.246 crore for 2010-11, a reduction of Rs.1,941 crore or 88 percent.

The Defence Research and Development Organisation (DRDO) has got a hike of Rs.881 crore to Rs.5,230 crore from its revised allocation of Rs.4,349 crore in the previous fiscal.

China plans to increase its defense budget by 7.5 percent in 2010, only about half of last year's planned growth of 14.9 percent, a parliament spokesman said here on Thursday.

The planned defense budget is 532.115 billion yuan (about 78 billion U.S. dollars), a rise of about 37 billion yuan from last year's defense expenditure, Li Zhaoxing, spokesman for the annual session of the National People's Congress (NPC), told a press conference.

Defense spending would account for 6.4 percent of the country's total fiscal expenditure in 2010, the same with last year, he said.

However, Li stressed that the figures would not be final until the budget plan is approved at the NPC annual session due to open in Beijing on Friday.

It is the first time for China's defense budget growth rate to drop to less than 10 percent in recent years which saw a row of consecutive double-digit increases.

This year's increased budget will be mainly be spent to support the reform of China's military and improve its capability to deal with varied threats and complete diversified tasks, Li said.

Part of the money will also be used to raise the living standards of servicemen, he said.

China has always taken the road of peaceful development and keep in line with the defensive national defense policy, Li said.

Taking into account China's large population, its vast territory, and its long coastline, the country's defense budget is "comparatively low," according to the former Foreign Minister.

"China's defense expenditure in recent years accounted for about 1.4 percent of its GDP," he said, adding that the ratio was four percent for the United States, and more than two percent for the United Kingdom, France and Russia.

He said China has been continuously raising its military transparency by submitting defense budgets to the NPC annual sessions for approval, issuing white papers every two years on its national defense, and establishing a spokesperson system and websites for its Defense Ministry.

Here's an opinion from Forbes India special about India's next ten years:

was considerable hoopla when the Indian economy crossed the trillion dollar mark for the first time three years ago. Over the next 10 to 15 years, it is now almost inevitable that our economy will touch $3 trillion. Last week, I had an interesting chat with K.V. Kamath, ICICI Bank’s non-executive chairman, about the implications of such phenomenal growth. Perhaps with the exception of China, nowhere in the world has one seen such a large mass of people go through a period of unprecedented growth. Even though China’s march began in 1978, the real boom in that economy started in 2000 and lasted for more than 10 years. During this period, per capita incomes have trebled there.

On the other hand, India began its charge in 1991. And by 2025, per capita incomes are likely to move up three fold from the current base of about $1,000. Yet Kamath raised a significant question: How much do we really know what happens to a society that goes through such rapid change? China could have offered some clues, but no one is sure whether this transformation has been credibly recorded there. Now, when India steps up for her moment in history, it’ll perhaps offer a once-in-a-lifetime opportunity for researchers and media to chronicle this massive surge.

Set against the backdrop of last week’s Union Budget, that’s exactly what this special edition attempts to do. Associate Editor Dinesh Narayanan and Principal Correspondent Udit Misra lay out the big challenges facing the country over the next decade. Their essay picks up clues from the Budget speech and then focusses our attention on four hot-button issues that will keep our policy-makers awake at night.

We then pick up the four big bets that this government has made — education, homeland security, climate change and roads — and look at how each minister in charge is using a new approach to drive his agenda.

Finally, the concept of inclusive growth suggests that the benefits of development must touch all our states in ample measure. Yet in states like Bihar and Uttar Pradesh, the human development indices are almost as bad as that of African countries. So why can’t we learn to replicate the success in one state in another? We’ve picked out two important stories of transformation that offer critical lessons. Associate Editor Malini Goyal’s family quit Bihar more than a decade ago. Quietly but surely, under Chief Minister Nitish Kumar, Bihar has undergone a huge upheaval for the past four years. Malini returns to her home state to discover why good governance can make a difference even in a seemingly hopeless situation. Make sure you read her personal account on page 68.

The agricultural crisis has tormented the minds of policymakers and farmers alike. Some weeks ago, we found the answers in unexpected quarters: The state of Gujarat. In the last few years, Gujarat’s agrarian sector has grown at three times the national average. Consulting Editor R.N. Bhaskar travels to the hotspot to bring you an amazing story of agricultural revival. It underscores my belief that we don’t need new solutions. All we need is political will and foresight.

Here are some facts about India's "security think tanks" from an Indian blogger writing about "escape from India":

With the emergence of Hindutva fascist forces and their alliance with Neo cons and Zionists, India witnessed a sharp increase in the number of research institutes, media houses and lobbying groups. According to a study by Think Tanks & Civil Societies Program at the University of Pennsylvania, India has 422 think tanks, second only to the US, which has over 2,000 such institutions.

Out of 422 recognized Indian think tanks, around 63 are engaged in security research and foreign policy matters, which are heavily funded by global weapon industry. India’s Retired spies, Police officers, Military personals, Diplomats and Journalists are hired by such national security & foreign policy research institutes which gets enormous fund from global weapon industry. These dreaded institutions are in fact has a hidden agenda. Behind the veil, they work as the public relations arm of weapon industry. They create fake terror stories with the help of media and intelligence wing, manipulate explosions through criminals in areas of tribals, dalits or minorities in order to get public acceptance for weapon contracts.

By creating conflicts in this poor country, Brahmin spin masters get huge commission from the sale of weapons to government forces. To this corrupt bureaucrats, India’s ‘National Interest‘ simply means ‘their self Interest’. Their lobbying power bring more wealth to their families as lucrative jobs, citizenship of rich countries and educational opportunities abroad.

Mentionable that India is one of the world’s largest weapons importers. Between 2000 and 2007 India ranked world’s second largest arms importer accounting for 7.5 % of all major weapons transfers. It stood fourth among the largest military spender in terms of purchasing power in 2007 followed by US, China and Russia.

Over 1,130 companies in 98 countries manufacture arms, ammunitions and components. 90 % of Conventional arms exports in the world are from the permanent five members of the United Nations Security Council namely USA, UK, Russia, China & France. The countries of Africa, Latin America, Asia, and the Middle East hold 51 per cent of the world’s heavy weapons.

The Defence Offset Facilitation Agency estimating the expenditure on the sector at USD 100 billion for next five years. At least 38 court cases relating to arms agreements are still pending against bureaucrats and military officers. Hindu fascist forces currently enjoy upper hand in media, civil service, judiciary, defence and educational streams of Indian society. Sooner or later, 25,000 strong democratic institutions in India will be collapsed and the country will be transformed to a limited democracy under the rule of security regime like Turkey or Israel. Hindutva’s security centric nationalism never was capable of bringing peace and protection to the life of our ordinary citizens.

According to Global Peace Index, India currently ranked on bottom, (122 with 2.422 score). Interestingly, our favourite arms supplier, Israel is among the worst performer when it comes to peace ranking. (141). It reminds a simple fact that the peace cannot be attained by sophisticated security apparatus.

Further more, India topped on Asian Risk Prospects -2009, with the highest political and social risk, scoring 6.87, mainly because of internal and external instability (PERC)

The French government held up its 1.6 billion dollars sale of arms to Pakistan, under pressure from India, according to reports from India:

The military hardware was to be used for Pakistan's JF-17 combat aircraft. The sale of electronics and missiles, under the first part of a six billion euro deal, was signed with Islamabad.

Paris is said to be concerned over whether Pakistan would be able to pay-off the huge deal amount or not. And, also worried over the safety of the sophisticated technology.

However, experts are not willing to accept India would be able to exert pressue on France to hold the deal for long.

"I don't really know how much pressure India can really exert on France because in the past we have seen that America has tremendous influence on their policies," said Hamid Gul, former DG of ISI.

"Americans have supplied us already. They have committed to supply us 18 F-16 aircraft. Any aircraft that France can put out it can be outmatched by what the Americans can do."

"We have very good relations in this field with China and we have developed JF-17 Thunder. We don't see any immediate possibility of war. Therefore we have time in which we can develop technology," he added.

Pakistan is estimated to have more nuclear warheads than India and the two Asian neighbours along with China are increasing their arsenals and deploying weapons at more sites, two eminent American atomic experts have claimed.

While Pakistan is estimated to possess 70-90 nuclear weapons, India is believed to have 60-80, claims Robert S Norris and Hans M Kristensen in their latest article 'Nuclear Notebook: Worldwide deployments of nuclear weapons, 2009'.

The article published in the latest issue of 'Bulletin of the Atomic Science' claimed that Beijing, Islamabad and New Delhi are quantitatively and qualitatively increasing their arsenals and deploying weapons at more sites, yet the locations are difficult to pinpoint.

For example, no reliable public information exists on where Pakistan or India produces its nuclear weapons, it said.

"Whereas many of the Chinese bases are known, this is not the case in Pakistan and India, where we have found no credible information that identifies permanent nuclear weapons storage locations," they said.

"Pakistan's nuclear weapons are not believed to be fully operational under normal circumstances, India is thought to store its nuclear warheads and bombs in central storage locations rather than on bases with operational forces. But, since all three countries are expanding their arsenals, new bases and storage sites probably are under construction," the two nuclear experts said.

Here is an Indian report which disregards any Pakistani indigenous contribution to its missile programs and gives China and North Korea the entire credit. This might be a good way for the Indians not to feel too sorry for themselves. But the fact is that Pakistan has made tremendous progress in its domestic scientific research capabilities and indigenous industrial manufacture. The Indians have more access to foreign help than Pakistan and yet their program lags behind Pakistan:

With active help from China and North Korea, Pakistan has surged well ahead of India in the missile arena. The only nuclear-capable ballistic missile in India's arsenal which can be said to be 100% operational as of now is the short-range Prithvi missile.

Though the 700-km Agni-I and 2,000-km-plus Agni-II ballistic missiles are being "inducted" into the armed forces, it will take "some time" for them to become "fully-operational in the numbers required".

Defence sources said the armed forces were still in the process of undertaking the "training trials" of Agni-I and Agni-II to give them the requisite capabilities to fire them on their own.

Of the two, the progress report of Agni-I, tested for the first time in January 2002 to plug the operational gap between Prithvi (150-350 km) and Agni-II missiles, is much better. The Army has already conducted two "user training trials", one in October 2007 and other in March 2008, of the Pakistan-specific Agni-I missile.

The fourth test of 3,500-km Agni-III, which will give India the strategic capability to hit targets deep inside China, is also on the anvil now. But Agni-III, tested successfully only twice in April 2007 and May 2008, will not be ready for induction before 2012.

Then, of course, design work on India's most ambitious strategic missile with near ICBM (intercontinental ballistic missile) capabilities, the 5,000-km range Agni-V, which incorporates a third composite stage in the two-stage Agni-III, is also in progress. "We should be ready to test Agni-V by 2010-2011," said an official.

So, in effect, the missile report card is rather dismal at present. "Unlike Pakistan, our programme is indigenous. But a strategic missile needs to be tested 10 to 15 times, over a variety of flight envelopes and targets, before it can be said to be fully-operational. A missile cannot be dubbed ready just after three to four tests," said an expert.

Keeping this benchmark in mind, only Prithvi can be dubbed to be fully ready. Defence PSUs like Bharat Dynamics Ltd, Bharat Earth Movers Ltd and Mishra Dhatu Nigam Ltd, in fact, are stepping up production of the different Prithvi variants.

Army, for instance, has orders worth Rs 1,500 crore for 75 Prithvi-I and 62 Prithvi-II missiles, while IAF has gone in for 63 Prithvi-II missiles for over Rs 900 crore.

Navy, in turn, has ordered Dhanush missiles, the naval version of Prithvi, with a 350 km strike range, for its "dual-tasked" warships, INS Subhadra and INS Suvarna.

India wants to gatecrash into the very exclusive club of `Big-Five' countries like Russia, US and China, which have both ICBMs (missiles with strike ranges over 5,500-km) and SLBMs (submarine-launched ballistic missiles), before 2015.

The SLBM quest is specifically crucial since it's the most effective and secure leg of the "nuclear weapon triad", with land-based missiles and aircraft capable of delivering nuclear bombs constituting the first two components.

The initial range of K-15 SLBM being developed by DRDO will, however, be limited to 750-km, far less than the over 5,000-km range SLBMs brandished by the `Big-5' countries.

In a recent interview, food campaigner Jean Dreze aid, "For Indians to eat like the Chinese, let alone the French or the Italians, there will have to be a lot more food around."

Here are some excerpts from it:

"Firstly, I would not agree that India is “self-sufficient” in food production. It looks self-sufficient only because food intake is abysmally low, not only in terms of quantity but also in terms of quality. For Indians to eat like the Chinese, let alone the French or the Italians, there will have to be a lot more food around. Having said this, low food production is not the main issue, and food production itself would easily go up if there were enough purchasing power among the masses. The main issue is people’s inability to secure essential things that are required for good nutrition. These include not only food but also other inputs such as clean water, health care, sanitation, basic education and child care. All these fields of public policy have been grossly neglected for a long time."

"The NREGA can certainly help, and it does. In a recent survey of 1,000 NREGA workers conducted in 10 districts of North India, 69 per cent of the respondents felt that the NREGA had “helped them to avoid hunger” [see “The Battle for Employment Guarantee”, Frontline, January 2009]. But even if the NREGA functioned really well, which is not the case, it would have a limited impact on the nutrition situation, for many reasons. Some people are unable to participate in NREGA work because of illness, disability, old age, and so on. Those who do participate earn a meagre income at best, even if they work for 100 days in the year. And most importantly, good nutrition is not a matter of income alone. This applies especially to child nutrition, which is the foundation of good nutrition for all.

Even among households that are relatively well-off in economic terms, child under-nutrition is not uncommon, for reasons that can range from low birthweight and poor breastfeeding practices to lack of health care or gender discrimination. This is why a range of complementary interventions are required. It would be pointless to expect a single intervention, whether it is the NREGA or the PDS or the ICDS, to ensure food security."

Part of the problem fueling anger and insurgencies is the growing number of the poor in India. Here's a recent Reuters report:

India now has 100 million more people living below the poverty line than in 2004, according to official estimates released on Sunday.

The poverty rate has risen to 37.2 percent of the population from 27.5 percent in 2004, a change that will require the Congress-ruled government to spend more money on the poor.

The new estimate comes weeks after Sonia Gandhi, head of the Congress party, asked the government to revise a Food Security Bill to include more women, children and destitutes.

"The Planning Commission has accepted the report on poverty figures," Abhijit Sen, a member of the Planning Commission told Reuters, referring to the new poverty estimate report submitted by a government panel last December.

India now has 410 million people living below the U.N. estimated poverty line of $1.25 a day, 100 million more than was estimated earlier, officials said.

India calculates how much of its population is living below the poverty line by checking whether families can afford one square meal a day that meets minimum nutrition needs.

It was not immediately clear how much more the federal government would have to spend on the poor, as that would depend on the Food Security Bill when it is presented to the government after the necessary changes, officials say.

India's Planning Commission will meet the food and expenditure secretaries next week to estimate the cost aspects of the bill, government officials said.

A third of the world's poor are believed to be in India, living on less than $2 per day, worse than in many parts of sub-Saharan Africa, experts say.

Here are some excepts of Nehru University's Prof Jayanti Ghosh's video interview on Real News Network in which she says there is "no Indian miracle":

JAY: So in India you're saying there never was major reforms and it's getting worse.

GHOSH: Absolutely. If you look at the pattern of Indian growth, it's really more like a Latin American story. We are now this big success story of globalization, but it's a peculiar success story, because it's really one which has been dependent on foreign—you know, we don't run trade surpluses. We don't even run current account surpluses, even though a lot of our workers go abroad to Saudi Arabia and the Gulf, to California, as IT workers. We still don't really run current account surpluses. So we've been getting capital inflow because we are discovered as this hot destination. You know, we are on Euromoney covers. We are seen as this place to go. Some of our top businessmen are the richest men in the world. They hit the Fortune top-ten index. All of that kind of thing. This capital inflow comes in, it makes our stock market rise, it allows for new urban services to develop, and it generates this feel-good segment of the Indian economy. Banks have been lending more to this upper group, the top 10 percent of the population, let's say. It's a small part of the population, but it's a lot of people, it's about 110 million people, which is a pretty large market for most places. So that has fuelled this growth, because otherwise you cannot explain how we've had 8 to 10 percent growth now for a decade. Real wages are falling, nutrition indicators are down there with sub-Saharan Africa, a whole range of basic human development is still abysmal, and per capita incomes in the countryside are not growing at all.

JAY: So I guess part of that's part of the secret of what's happening in India is that the middle, upper-middle class, in proportion to the population of India, is relatively small, but it's still so big compared to most other countries—you were saying 100, 150 million people living in this, benefiting from the expansion. And it's a lot bigger. It's like—what is it? Ten, fifteen Canadas. So it's a very vibrant market. But you're saying most of the people in India aren't seeing the benefits.

GHOSH: Well, in fact it's worse than that. It's not just that they're not seeing the benefits. It's not that they're excluded from this. They are part of this process. They are integrated into the process. And, in fact, this is a growth process that relies on keeping their incomes lower, in fact, in terms of extracting more surplus from them. Let me just give you a few examples. You know, everybody talks about the software industry and how competitive we are. And it's true. It's this shiny, modern sector, you know, a bit like California in the middle of sub-Saharan Africa. But when you look at it, it's not just that our software engineers achieve, it's that the entire supporting establishment is very cheap. The whole system which allows them to be more competitive is one where you are relying on very low-paid assistants, drivers, cooks, cleaners. You know, the whole support establishment is below subsistence wage, practically, and it's that which effectively subsidizes this very modern industry.

NEW DELHI, Jan 3, 2010 (IPS) - As a nurse, Amita Dhaka sees much suffering, but what she finds hard to handle is inadequate nutrition and even hunger among poor in-patients.

At the busy, charitable hospital run by the Rural Medicare Society (RMS) at Mehrauli, on the outskirts of the national capital, where Dhaka is employed, there are provisions for poorer patients. But this is not the case with most state-run or private medical facilities, where patients are left to their own devices when it comes to procuring prescribed medicines or getting their meals.

"The problem is that attendants also require meals, and we see that very often they end up being an additional burden on the pockets of patients admitted in hospital," said Dhaka.

According to Dr. Aarti Vasisht, one of 28 doctors and surgeons working at the RMS hospital, providing patients with timely, balanced and nutritious meals is important because it has a direct bearing on recovery.

The chest specialist added that many of her patients are being treated for tuberculosis and are on heavy medications. "These are people who need to be on special diets and must be provided timely, nutritious meals," she said.

Vasisht has been able to arrange free meals for her patients at the RMS hospital from the charitable Santhigiri Ashram, which has a mission of providing free or subsidised food and medical care for the needy.

"We hope to expand these services and reach other hospitals in the national capital, but this is not easy in a time of recession when the prices of food items have gone through the roof," said Swami Pranavsuddhan, director of the Santhigiri Ashram. "The good thing though is that this is a cause that people seem interested in supporting, and New Delhi is a city of wealthy people who believe that feeding the poor and needy can add positively to their karma."

"These free meals go a long way for patients who may have to spend 300 rupees (6.4 US dollars) or more for each day of hospitalisation, which is an enormous burden for people living below the poverty line, earning less than two dollars a day,’’ Vasisht said.

"In India’s healthcare delivery system it is hard enough to get affordable medicines to most patients, and so the question of ensuring that they eat well is glossed over although everybody is aware of the problem,’’ she said.

The latest review of the National Rural Health Mission (NRHM), released last week, speaks of continuing difficulties in providing free drugs to patients and "the imperative of prescribing medicines from outside," when the government is committed to raising public spending on health from 0.9 percent of gross domestic product to two to three percent of GDP.

In sharp contrast to the services at the RMS centre are the swish hospitals dotting the capital that cater to the health needs of the well-to-do and to a burgeoning medical tourism industry that attracts 450,000 foreign patients each year.

Hospitals such as the ‘Indraprastha Apollo,’ which ranks among the world’s biggest private health facilities, do not allow attendants and provide patients with meals prepared under the careful supervision of dieticians.

The NRHM, which runs from 2005 to 2012, was set up after the government recognised that curative services favour the rich and that for every dollar spent on the poorest 20 percent of the population, three dollars are spent on the richest quintile.

The NRHM also acknowledges that over 40 percent of hospitalised Indians borrow heavily or sell assets to cover medical expenses and that over 25 percent of hospitalised Indians fall below the poverty line because of hospital expenses.

Here's a Times of India report today comparing nuclear arsenals of the two South Asian neighbors:

LONDON: Pakistan has 60 nuclear warheads and with two new plutonium reactors nearing completion in Khusab, its weapons grade plutonium production will jump seven-fold, according to latest figures released by Swedish institute SIPRI.

"Our conservative estimates are that Pakistan has sixty warheads and could produce 100 nuclear weapons at short notice," the Stockholm International Peace Research Institute (SIPRI) said in its latest annual report.

SIPRI also said that Islamabad was developing an air launched cruise missile Ra'ad and had also carried out four tests of its land launched sub-sonic cruise missile Babur. But said it was not clear whether these missiles would be developed to carry nuclear warheads.

The Swedish think-tank said that Pakistan's Khusab I reactor was giving the country 10 to 12 kgs of weapons grade plutonium.

Islamabad had earmarked 32 US supplied F-16 fighters along with short-range Ghaznavi I and Shaheen I missiles as the delivery systems for its nuclear weapons, it said.

SIPRI said while 400-km range Ghaznavi I and 1,200-km Shaheen I missiles were operational, Pakistan's other two potent missiles — medium range ballistic missile Ghauri I and Shaheen II were still in development stage.

In comparison India had also 60 to 70 nuclear warheads, the think-tank said.

New Delhi had only short-range surface to surface Prithvi I (with the range of up to 500 kms) and medium-range Agni I (upto 700 kms) missiles deployed as nuclear weapon delivery system, it said.

The Swedish institute said India's two other missiles Agni II (with the range of 1,200 kms) and Agni III (3,000 kms) were still under development, though Agni II had been handed over to the Army for user trial.

SIPRI also said that New Delhi was also developing a 1,000-km range sub-sonic cruise missile Nirbhay and had also test fired land-based version of the undersea missile K-15 which is being called Shourya.

It said that the deployment of warship-based Dhanush missile was underway.

The following is an assessment of India and Pakistan nukes by Arms Control website:

Three states—India, Israel, and Pakistan—never joined the NPT and are known to possess nuclear weapons. Claiming its nuclear program was for peaceful purposes, India first tested a nuclear explosive device in 1974. That test spurred Pakistan to ramp up work on its secret nuclear weapons program. India and Pakistan both publicly demonstrated their nuclear weapon capabilities with a round of tit-for-tat nuclear tests in May 1998. Israel has not publicly conducted a nuclear test, does not admit to or deny having nuclear weapons, and states that it will not be the first to introduce nuclear weapons in the Middle East. Nevertheless, Israel is universally believed to possess nuclear arms. The following arsenal estimates are based on the amount of fissile material—highly enriched uranium and plutonium—that each of the states is estimated to have produced. Fissile material is the key element for making nuclear weapons. India and Israel are believed to use plutonium in their weapons, while Pakistan is thought to use highly enriched uranium.

India: Up to 100 nuclear warheads. Israel: Between 75 to 200 nuclear warheads. Pakistan: Between 70 to 90 nuclear warheads.

Pakistan has announced it is to increase defence spending by 17% in the coming year, with analysts saying much of it will be used to combat militants.

In his budget speech to parliament, Finance Minister Abdul Hafeez Shaikh said security forces should know they had the support of MPs.

Defence spending will rise to more than $5bn a year from next month.

Pakistani forces have carried out major offensives in the north-west over the past year.

However, there has also been a wave of deadly attacks by Islamic militants throughout the country.

"I think security is our topmost issue," said Mr Shaikh.

"We are facing a situation in which our armed forces, paramilitary forces and security forces are laying down their lives. They are bearing pain for the country and the people, I salute them. They should know from this house that we all stand by them."Suicide attacks

In the past three years more than 3,400 people have been killed across Pakistan in bomb blasts and suicide attacks blamed on Taliban militants.

Last week more than 90 people were killed in co-ordinated attacks on two mosques of the minority Ahmadi Islamic sect in Lahore.

Pakistan, a vital ally for the US, has been heavily burdened by the cost of fighting Taliban insurgents along its Afghan border.

Mr Shaikh said government policies had reined in inflation - from 25% down to 13% - and brought economic stability.

"We are seeing the beginning of recovery," he said.

In 2008 Pakistan secured a $10bn loan package from the International Monetary Fund to keep its economy on track.

Analysts say the IMF is now putting pressure on Pakistan's financial institutions to make further reforms.

Here's Ahmad Rahid's take published by BBC on Pakistan budget priorities for 2010-2011:

When the $38bn annual budget was announced in parliament on 5 June, legislators sat up when it was announced that defence spending would be $5.2bn for 2010-11 - a rise of 17% compared to last year or 13.7% of the total budget.

Even more shocking news came a few days later when Saqib Shirani, principal economic adviser to the government, corrected that figure to say that actual defence spending for 2010-11 would be $7.9bn, a 30% rise compared to last year and 21% of the total budget.

The government did not disclose how it accounted for some $1.3bn received over the past year in Coalition Support Funds (CSF) by the US administration for fighting "terrorism".

With 28% of the budget being reserved this year for servicing Pakistan's huge external debt of $54bn, nearly 60% of the budget is taken up by just two items - defence spending and debt servicing.

Almost the entire development budget of $9.2bn will be provided by outside donors.

Meanwhile the country spends just 2% of Gross Domestic Product (GDP) on education, despite the fact that average literacy is only 57%. Even the army admits that the lack of education is fuelling militancy.

However with the economy in a downward spiral and the government facing an internal funding crisis in the months ahead, Islamabad has begun to threaten the US.

Retired Lt Gen Syed Akthar Ali told parliament that the US government had for two years willfully withheld billions of dollars of CSF that were owed to Pakistan.

''The time that we have to rethink our security priorities about external threats is approaching,'' Mr Ali warned recently.

"We will stop operations (in Fata) and go back to the eastern borders,'' he added threateningly.

However he admitted that in the past six months the US had released $1.3bn in CSF arrears, but was still holding back payments of $1bn.

Prime Minister Yousuf Raza Gilani was equally blunt when he told visiting Richard Holbrooke, US special envoy for Pakistan and Afghanistan, that ''time is running out fast, public support can only be kept intact if the international community start delivering on their pledges.''

At a conference in Tokyo a year ago, major donors who make up the "Friends of Pakistan" pledged $5bn in aid, but so far few pledges have been honoured except by the US.

''There is grand disillusionment amongst the Europeans for Pakistan's refusal to address our concerns - transparency about aid funds, improving governance, using aid money to build up defences against India rather than fighting terrorism and its lack of concern for minorities,'' a senior European diplomat said.

Mr Gilani's recent trip to the European Union (EU) in Brussels, following the brutal killing of 90 Ahmedis in Lahore by militants was a public relations disaster, with the EU bluntly refusing to fund Pakistan unless it improved its governance record.

Yet even as Pakistani leaders cajole the West for more money and warn of an impending economic collapse, the army insists that the world must recognise Pakistan as a full blown nuclear power.

Here are excerpts from an interview with US investor Jim Rogers published in Forbes March 2010 issue.

After all the budget euphoria, it is time for a reality check. Investor and venture capitalist Jim Rogers remains deeply skeptical of India's future. In an interview with S. Srinivasan, he argues that the country is sitting on a fiscal time bomb.

Some specific global lessons or examples that India can adopt from other countries such as China?Open your borders to foreign capital and brains. For example, foreigners cannot enter retailing in India, but Wal-Mart, etc. are all over China. Your politicians close down free commodity markets every time prices rise as if the markets were making the prices rise!

Farmers can own only very, very small farms, so India cannot compete on the world stage, yet India should be one of the great agriculture nations of the world.

What will it take to get you to invest in India?Some sense of 21st-century reality. Open the economy [in areas] such as retailing, energy, agriculture, etc. Make the currency fully convertible.

What are the lost opportunities in the budget, according to you?The same things I just mentioned. Likewise why not start reducing the gigantic debt if things really “are getting better,” as he claims?

You have watched India for a long time. Where do you think the country will go from here?Continue muddling along until the reality of the huge debt-to-GNP [ratio] hits home and stops things.

There is Booming industry of Terrorism Experts and Security Research Institutes in India, according to CyberGandhi, an Indian blogger who wrote a post titled "A Zillion Reasons to Escape From India":

With the emergence of Hindutva fascist forces and their alliance with Neo cons and Zionists, India witnessed a sharp increase in the number of research institutes, media houses and lobbying groups. According to a study by Think Tanks & Civil Societies Program at the University of Pennsylvania, India has 422 think tanks, second only to the US, which has over 2,000 such institutions.

Out of 422 recognized Indian think tanks, around 63 are engaged in security research and foreign policy matters, which are heavily funded by global weapon industry. India’s Retired spies, Police officers, Military personals, Diplomats and Journalists are hired by such national security & foreign policy research institutes which gets enormous fund from global weapon industry. These dreaded institutions are in fact has a hidden agenda. Behind the veil, they work as the public relations arm of weapon industry. They create fake terror stories with the help of media and intelligence wing, manipulate explosions through criminals in areas of tribals, dalits or minorities in order to get public acceptance for weapon contracts.

By creating conflicts in this poor country, Brahmin spin masters get huge commission from the sale of weapons to government forces. To this corrupt bureaucrats, India’s ‘National Interest‘ simply means ‘their self Interest’. Their lobbying power bring more wealth to their families as lucrative jobs, citizenship of rich countries and educational opportunities abroad.

Mentionable that India is one of the world’s largest weapons importers. Between 2000 and 2007 India ranked world’s second largest arms importer accounting for 7.5 % of all major weapons transfers. It stood fourth among the largest military spender in terms of purchasing power in 2007 followed by US, China and Russia.

Over 1,130 companies in 98 countries manufacture arms, ammunitions and components. 90 % of Conventional arms exports in the world are from the permanent five members of the United Nations Security Council namely USA, UK, Russia, China & France. The countries of Africa, Latin America, Asia, and the Middle East hold 51 per cent of the world’s heavy weapons.

The Defence Offset Facilitation Agency estimating the expenditure on the sector at USD 100 billion for next five years. At least 38 court cases relating to arms agreements are still pending against bureaucrats and military officers. Hindu fascist forces currently enjoy upper hand in media, civil service, judiciary, defence and educational streams of Indian society. Sooner or later, 25,000 strong democratic institutions in India will be collapsed and the country will be transformed to a limited democracy under the rule of security regime like Turkey or Israel. Hindutva’s security centric nationalism never was capable of bringing peace and protection to the life of our ordinary citizens.

According to Global Peace Index, India currently ranked on bottom, (122 with 2.422 score). Interestingly, our favourite arms supplier, Israel is among the worst performer when it comes to peace ranking. (141). It reminds a simple fact that the peace cannot be attained by sophisticated security apparatus.

Further more, India topped on Asian Risk Prospects -2009, with the highest political and social risk, scoring 6.87, mainly because of internal and external instability (PERC)

Here's an excerpt from a recent report by Jawed Naqvi, Dawn's New Delhi correspondent:

A particularly disturbing slogan heard in the Kashmir Valley, where its young school-goers and old patriarchs, angry women and restive youth are courageously defying Indian rule, is enough to put off any sensitive sympathiser. “Bhooka nanga Hindustan; Jaan se pyaara Pakistan.” (Starving and tattered India we reject; Pakistan - land of our dreams - we embrace.)

This slogan conveys acute political bankruptcy in a region which has lived with naked military repression for more than 20 years. I’m sure any Pakistani with a sense of justice would also be uncomfortable with the warped mindset the slogan betrays.

That Kashmir is reeling under Indian occupation is not a secret. That Pakistan has played a questionable role there is also well known. Yet, for Kashmiris to see their struggle as part of the many battles being waged by the poorest of the poor against the Indian state’s multi-pronged injustices against its own people, would not compromise or be a contradiction in Kashmir’s struggle for self-determination. The simple question for Kashmiris to ask themselves is, isn’t the same state that has killed 60 young Kashmiris in three months, also responsible for tens of thousands of suicides by indebted farmers in India? Does Sharmila Irom, who is fighting to repeal the law that gives unbridled powers to security forces in her Manipur state have no relevance for the same struggle in Kashmir?

The tribespeople of Chhatisgarh, Orissa, Jharkhand and West Bengal are fighting for their fundamental rights. One of their demands is that they not be evicted from their homes to accommodate corporate land grab. Is this not what Kashmiri Pandits suffered at the hands of the Indian state as well as non-state actors in their homeland without any redress from successive Indian governments that claim to represent them?

To get a peek into the Indian psyche, read the following advice offered by Financial Times to David Cameron prior to his recent India trip:

The first is 'Kashmir', he says. Recalling controversial utterances by previous British foreign secretaries like Robin Cook and David Miliband, Barker tells Cameron: "The quickest way to turn a charm offensive into a diplomatic fiasco. The basic rule: British ministers should say nothing. Don't dare criticise, offer to help, or link bringing peace to tackling terrorism. Stray words have consequences."

The second is 'Poverty'. "More poor people than anywhere on earth. But not worth mentioning too loudly. Talk about the New India instead. Mention the aid review. A patronising tone is fatal."

The third, 'Coming over too fresh'. Barker says: "The young, dynamic, no-nonsense version of Cameron should probably be left behind. It's time to learn some manners. Indian politicians are, as a rule, double his age and four times as grand. If the meetings are stuffy, formal, overbearingly polite, that's a good thing."

The fourth is the 'Immigration cap'. The columnist writes: "A big issue for the Indian elite. Anand Sharma, the commerce minister, raised his 'concerns' earlier this month with Cameron himself. A heavily bureaucratic and stingy visa regime will not encourage Indians to work or study in Britain."

In a recent interview, Indian Army chief Gen Singh talks about "fighting through our area which has been contaminated by a nuclear strike. We are confident that we will get through in such contaminated areas and this is part of our training methodology, doctrine and our concept".

It begs the questions: Is Mr Singh breeding super jawans immune to radiation?

I think Gen VK Singh's thinking is naive and dangerously out of date, it's as old as the 1950s when the Americans were building shelters in their basements to survive nuclear attack by the Soviet Union. I hope someone puts some sense into Singh's empty little hand about the reality of modern nuclear warfare.

India is today the world's largest importer of arms. These include fighter jet planes, missiles and radar systems for strategic partnerships and geo-political power. India is also investing in security and surveillance to combat foreign threats and resistance from its own people in places like the Kashmir valley, and the North East and tribal regions of Central India. This provides tremendous opportunity for multi-national corporations to sell and invest in India, a country marching ahead as an economic and military power.

A report from the Stockholm International Peace Research Institute's (SIPRI) March 14, 2011 revealed that India received 9 per cent of the volume of international arms transfers during 2006–10. The international consultancy firm KPMG estimates that India will sign military contracts worth $112 billion by 2016.

This year India increased annual defense spending by about 11.6 percent to $36 billion in order to modernize the armed forces to counter the military inflation and strategic threats posed by China's rapidly expanding military capabilities..

In sharp contrast, allocation for agri culture and allied activities was reduced by 2 percent and allocation of non-plan expenditures on all social services declined by 14 percent from approximately $7.8 billion in 2009-10 to $6.6 billion for 2010-11. The World Bank estimates that 80% of India's population lives on less than $2 a day, comparable to sub-Saharan Africa.

Corporate Diplomacy to Secure Arms Deals

With assistance from their governments, arms corporations in countries such as Russia, US, France, Britain, Sweden and Israel are competing to procure million and billion dollar deals with India.

Last year India saw an unprecedented series of diplomatic visits from head of states of nuclear and defense powers. Notably chief executives of major nuclear and defense corporations had escorted the head of states on their visits. British Prime Minister David Cameron's visit to India in July was followed by US President Obama's in November and by French President Nicolas Sarkozy's in December.

A $779 million contract was signed for 57 BAE Systems Hawk advanced jet trainers for the Indian military during Cameron's visit. Engine maker Rolls-Royce clinched a $280 million deal to supply engines for the jet trainers for the Indian air force and navy. Seven agreements in key areas such as defense, space and nuclear energy were signed during Sarkozy's visit.

US President Obama and Secretary of State Hilary Clinton's visits in 2010 were also about strengthening economic and strategic partnerships. Twenty deals totaling nearly $10 billion dollars in U.S. exports were signed during the President's visit. Following that visit, the US reformed its export control regime and removed key Indian defense and civil space entities from U.S. restricted lists to help boost high technology exports and allow for enhanced defense and space cooperation with India.

The close nexus of corporations and governments is evident from the resignation of Timothy J. Roemer as US Ambassador to India on April 28, 2011, soon after the announcement that two US corporations, Boeing and Lockheed Martin had lost the race for procuring a $10 billion contract to supply 126 fighter jets to the Indian Air Force. The US is still hopeful a four billion dollar sale of C17 aircraft will be finalized soon. French company Dassault's Rafale and the Typhoon from the Eurofighter consortium (representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica) have been shortlisted.

India’s tank fleet lacks ammunition, its air defences are “97 percent obsolete” and its elite forces lack essential arms, the country’s army chief wrote in an explosive letter leaked Wednesday.

The letter to the prime minister dated March 12 – widely reported by the Indian media – lists the shortcomings of the armed forces in embarrassing detail in a blow to the government and the Asian giant’s military prestige.

Its publication also ups the stakes in a public battle between army chief General VK Singh and the government which began with a dispute over Singh’s retirement earlier this year.

“The state of the major (fighting) arms i.e. mechanised forces, artillery, air defence, infantry and special forces, as well as the engineers and signals, is indeed alarming,” Singh wrote in the letter, DNA newspaper reported.

The army’s entire tank fleet is “devoid of critical ammunition to defeat enemy tanks”, while the air defence system is “97% obsolete and it doesn’t give the deemed confidence to protect… from the air,” he wrote, according to DNA.

The infantry is crippled with “deficiencies” and lacks night fighting equipment, while the elite special forces are “woefully short” of “essential weapons”.

Singh also told The Hindu newspaper this week that he had informed Defence Minister A.K Antony of a $2.8 million bribe offered to him in 2010, leading to embarrassing questions as to why the government did not order an enquiry.

Antony told parliament on Wednesday that he was aware of the letter to Prime Minister Manmohan Singh and he would reply appropriately.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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